Estimating the cost savings and avoided CO2 emissions in Brazil by implementing energy efficient policies

• Published in: Energy policy Vol. 67; pp. 4 - 15
• Main Authors: Calili, Rodrigo F., Souza, Reinaldo C., Galli, Alain, Armstrong, Margaret, Marcato, André Luis M.
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.04.2014; Elsevier
• Subjects: Brazil; Carbon emissions; Economics and Finance; Energy efficiency; Energy policy; Estimation; Geometric Brownian motion; Humanities and Social Sciences; Hydrothermal power system; Latin America; Renewable energy sources; Stochastic dual dynamic programming; Sustainability; Geometric Brownian motion; Hydrothermal power system; Stochastic dual dynamic programming; Energy Efficienct Policies; CO2 Emissions
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2013.09.071

Investing more in renewable energy sources and using this in a rational and efficient way is vital for the sustainable growth of world. Energy efficiency (EE) will play an increasingly important role in future generations. The aim of this work is to estimate how much the PNEf (National Plan for Energy Efficiency) launched by the Brazilian government in 2011 will save over the next 5 years by avoiding the construction of additional power plants, as well as the amount of the CO2 emission. The marginal operating cost is computed for medium term planning of the dispatching of power plants in the hydro-thermal system using Stochastic Dynamic Dual Programming, after incorporating stochastic energy efficiencies into the demand for electricity. We demonstrate that even for a modest improvement in energy efficiency (<1% per year), the savings over the next 5 years range from R$ 237 million in the conservative scenario to R$ 268 million11US$ 1.00=R$ 1.99 in January 31, 2013. in the optimistic scenario. By comparison the new Belo Monte hydro-electric plant will cost R$ 26 billion to be repaid over a 30 year period (i.e. R$ 867 million in 5 years). So in Brazil EE policies are preferable to building a new power plant. •It is preferable to invest in energy efficiency than to construct a big power plant.•An increase of energy efficiency policies would reduce the operating cost in Brazil.•We have a great reduction of CO2eq emissions by means of energy efficiency policies.